The Most-Favoured-Nation Treatment Obligation: Trends Leading to its Marginalisation and whether a Threat to the Multilateral Trading System

Munich Personal RePEc Archive

The Most-Favoured-Nation Treatment Obligation: Trends Leading to its

Marginalisation and whether a Threat to the Multilateral Trading System

Mua, Afuh George

26 November 2013

Online at https://mpra.ub.uni-muenchen.de/51729/

MPRA Paper No. 51729, posted 28 Nov 2013 07:37 UTC

t s o M e h

T - F a v o u r e d - N a it o n T r e a t m e n t O b il g a it o n : T r e n d s L e a d i n g t o ti s r

e h t e h w d n a n o it a s il a n i g r a

M a T h r e a t t o t h e M u tl li a t e r a l T r a d i n g S y s t e m

a u M e g r o e G h u f

A

T C A R T S B A

t s o M e h

T -Favoured- Treatmen tObilgaitoni s a f undamenta lp irnciple undert he mutlliatera lrtading q

e r e l p i c n ir p e h T . n o it a s i n a g r O e d a r T d lr o W e h t f o m e t s y

s uriesMembers t o accord t he sametarfi f

f o t r o p x e r o t r o p m i f o e m it e h t t a r e b m e M e n o y n a f o t c u d o r p e h t o t n e v i g t n e m t a e rt y r o t a l u g e r d n a

H . s r e b m e M r e h t o l l a o t

” s t c u d o r p e k il

“ oweve ,rr ecen trtendsshowdeviaiton rfomt hisr ulesomuch s e n i m a x e r e p a p s i h T . e l u r l a r e n e g a s a n a h t r e h t a r n o it p e c x e n a s a d e il p p a n e tf o t s o m s i ti t a h t o s

n o it a g il b O t n e m t a e r T N F M e h

t ,rtendsl eadingt ot hei mpo tranceo ftismarginailsaiton and whethe r a

rt l a r e t a li tl u m e h t o t t a e r h t a s i n o it a s il a n i g r a m s ti t a e rt e r t n e c e r e h t h ti

w ding system o rmerelyan

t a e r g o t h t a p e h t n o p e t s y r a n o it u l o v

e e r rtade ilberailsaiton.

.

I INTRODUCTION

t a s i n a g r o y n a f o g n i n o it c n u f r e p o r p e h t r o f y ti s s e c e n

A ion is the insttiuiton o fbasic rules for n

o it a s i n a g r o l a n o it a n r e t n I n a g n i e b n o it a s i n a g r O e d a r T d lr o W e h T . s r e b m e m s ti y b e c n a il p m o c

e d a r T d lr o W e h t , y ti s s e c e n s i h t o t e c n a il p m o c n I . e l u r s i h t o t n o it p e c x e n a t o n s i e d a rt g n i n r e v o g

a h n o it a s i n a g r

O s i nsttiuted basic p irnciples f o radherence by tis Members i n order t o ensure t he e v if , r e v e w o h , O T W e h t r e d n U . s t n e s e r p e r t i m e t s y s g n i d a rt l a r e t a li tl u m e h t f o g n i n o it c n u f r e p o r p

s e l p i c n ir p d n a s e l u r c i s a

b ²canbedisitnguished: x The pirncipleso fnon- cdis irminaiton;

x Ther uleonmarke taccess,i ncludingr ules on rtansparency x Ther ulesonunfai rrtade;

x The rules between rtade ilberailsaiton and othe rsocieta lvalues and interests ; d

n a

; t n e m t a e rt l a it n e r e ff i d d n a l a i c e p s n o s e l u r e h t g n i d u l c n i

x Ther ulespromo itngharmonisaitoni nspeciifc ifelds n

o n e h t f o m r a e n o y l n o , n o i s s u c s i d s i h t f o s e s o p r u p e h t r o

F -disc irminaiton p irnciple³ namely,t he

t s o

M -Favoured-Naitona lrteatmen tobilga itonasi tappilest ogoodsandservices wli lbediscussed .

1 BL L (Universtiyo fBuea ,Cameroon) ,LLMMerchantlieLaw( Universtiyo fStellenbosch ,SouthAfirca)

2Pete rVanDenBossche,’ Thel awandPoilcyoft heWolrdTradeOrganisaiton ,Text ,Case sandMateirals’ ,2^ndediiton

3Theotherarmoft heprinciplei st ha to fNaitona lTreatmen tObilgaiton

w n o i s s u c s i d e h

T li lbegin wtih ab irefi nrtoduciton oft he MFN rteatmen tobilgaiton undert he WTO s

e il p p a t i s

a to goods and services .I twli lthen move to discussing some o fthe rtadiitona l w

a l a f o n o it a c il p p a t c ir t s e h T . e l p i c n ir p N F M s i h t o t s n o it p e c x

e o rp irnciple ni al lcricumstances wli l r o w a l a f o n o it a c il p p a e h t , e r o f e r e h t e c it s u j f o d e e n e h t t e e m o T . y t e i c o s n i e c it s u j n i o t d a e l

e r o f e r e h t ll i w s i h T . r e ff i d s e il p p a t i h c i h w o t s e c n a t s m u c ri c d n a s t c a f s a y ti li b i x e lf d e e n l li w e l p i c n ir p

p e h t o t s n o it p e c x e r o f ll a

c resc irbed standard j us tas t here are excepitons t o t he MFN rteatmen t n

o it a g il b

o ⁴undert heWTOl aw .Atfe rdiscussingsomeoft heseexcepitons,t hediscussionwillt hen il

a n i g r a m g n i e b e l p i c n ir p N F M e h t f o e c n a tr o p m i e h t o t g n i d a e l s d n e rt t n e c e r e h t t a k o o

l sed ove r

e d a c e d e e r h t o t o w t t s a l e h

t s so much so t ha tti i s now mos to tfen appiled as an excepiton r athe r e

l u r l a r e n e g a n a h

t and whethert he r ecent r ertea to rmarginailsaiton i s a t hreatt o t he mutlliatera l m

e t s y s g n i d a

rt .The discussion wli lendwtiha conclusion wtihr egardt ot he r ecentr ertea trfom t he

. n o it a g il b o t n e m t a e rt N F M

.

II BASICPRINCIPLEOFMFNTREATMENTOBLIGATION

t s o M f o e l p i c n ir p s i h

T -Favoured-Naiton rteatmen tobilgaiton is found in Aritcle Io fthe Genera l l a r e n e G f o I I e l c it r A d n a s d o o g o t d r a g e r h ti w 4 9 9 1 ) T T A G ( e d a r T d n a s ff ir a T n o t n e m e e r g A

. e c i v r e s o t s d r a g e r h ti w ) S T A G ( s e c i v r e S n i e d a r T n o t n e m e e r g A

it r

A cle Ioft heGATT1994states :

“Wtih respec tto custom duites and charges o fany kind i mposed on or i n conneciton r o f t n e m y a p f o r e f s n a rt l a n o it a n r e t n I e h t n o d e s o p m i r o n o it a tr o p x e r o n o it a tr o p m i h ti w

e h t n o d e s o p m i r o n o it a tr o p x e r o s tr o p m

i Internaitona l rtansfe ro fpayments f ori mpo trs h ti w d n a , s e g r a h c d n a s e it u d h c u s g n i y v e l d o h t e m e h t o t t c e p s e r h ti w d n a , tr o p x e r o

, e g a t n a v d a y n a , II I e l c it r A f o 4 d n a 2 h p a r g a r a p n i o t d e rr e f e r s r e tt a m l l a o t t c e p s e r

t n o c y n a y b d e t n a r g y ti n u m m i r o r u o v a

f racitng pa try to any conrtac itng pa try to any y l e t a i d e m m i d e d r o c c a e b l l a h s y rt n u o c r e h t o y n a r o f d e n it s e d r o n i g n it a n i g ir o t c u d o r p

o s e ir o ti rr e t e h t r o f d e n it s e d r o n i g n it a n i g ir o s t c u d o r p e k il e h t o t y ll a n o it i d n o c n u d n

a fal l

”.

s e it r a p g n it c a rt n o c r e h t o

: s e t a t s s e c i v r e s o t s e il p p a t i s a N F M f o e l p i c n ir p e h t h ti w s l a e d h c i h w S T A G f o I I e l c it r A

4Therei st hef eart hatt hi smightl eadt ot heweakeningoft hemutlliatera lrtadings ystem

“Wtih respec tto any measure covered by this Agreement ,each Membe rshal laccord e M r e h t o y n a f o s r e il p p u s e c i v r e s d n a s e c i v r e s o t y ll a n o it i d n o c n u d n a y l e t a i d e m m

i mbe r

e k il o t s d r o c c a t i t a h t n a h t e l b a r u o v a f s s e l o n t n e m t a e

rt services and servicesuppilers”.

y n a s t n a r g h c i h w r e b m e M O T W a s e ri u q e r s e c i v r e s d n a s d o o g o t s e il p p a t i s a e l p i c n ir p N F M e h T

t e l b a r u o v a f e m a s t a h t t n a r g o t r e b m e M y n a o t t n e m t a e rt e l b a r u o v a

f reatmen tto al lothe rWTO

s r e b m e

M ⁵ .A WTO Memberi s no tallowed t o disc irminate between tis rtading pa trners undert his e l b a r u o v a f e r o m y tr a p g n it c a rt n o c e n o m o rf d e tr o p m i s t c u d o r p g n i v i g , e l p m a x e r o f , y b e l u r

t n a h t s s e c c a t e k r a m o t t c e p s e r h ti w t n e m t a e

rt he rteatmen ti taccords to products rfom othe r .

s r e b m e M

m o rf s tr o p m i o t r e b m e M O T W a y b d e t n a r g e g a t n a v d a y n a s e ri u q e r n o it a g il b o t n e m t a e rt N F M e h T

O T W r e h t o l l a m o rf s tr o p m i o t y ll a n o it i d n o c n u d n a y l e t a i d e m m i d e t n a r g e b o t y rt n u o c y n a

s r e b m e

M ⁶ .Once a Membe rhas granted an advantage to one Member ,i tcanno tmake the g n i v i g s r e b m e M r e h t o e s o h t n o p u l a n o it i d n o c s r e b m e M r e h t o o t e g a t n a v d a t a h t f o g n it n a r g

e l u r s i h t r e d n u e g a t n a v d a n a f o g n it n a r g e h T . e g a t n a v d a e h t r o f g n i y a p r o n r u t e r n i g n i h t e m o s

t o n t s u

m be condiitona lon whethe ra Membe rhas ce train characte irs itcs ,ce train legislaiton in s

n o it c a n i a tr e c s e k a tr e d n u r o e c a l

p ⁷ .

O T W r e h t o l l a o t y ll a n o it i d n o c n u d n a y l e t a i d e m m i n e v i g e b o t d e s o p p u s s i h c i h w e g a t n a v d a e h T

e k il o t d e d r o c c a e b y l n o n a c s r e b m e

M products ,services and service suppilers .Unilke products , s t c u d o r p f o s s e n e k il g n i n i m r e t e d n I . y lt n e r e ff i d d e t a e rt e b y a m s r e il p p u s e c i v r e s d n a s e c i v r e

s , t he

n i a p S n i l e n a

p -Unroasted Coffee t ook i nto consideraiton t he characte irsitcs of t he products, t hei r d

n

e -use and tarfi fregime o fthe othe rMembers .In e ffec tthe fundamenta lp irnciple behind the d r a g e r h ti w s r e b m e M O T W t s g n o m a n o it a n i m ir c s i d f o n o it n e v e r p e h t s i n o it a g il b o t n e m t a e rt N F M

. s r e il p p u s e c i v r e s d n a s e c i v r e s , s t c u d o r p e k il o t

. II

I EXCEPTIONSTOTHEMFNPRINCIPLESAS I T APPLIESTOGOODSANDSERVICES.

d i a s r e il r a e s

A the stirc tappilcaiton o fany rule i n al lstiuaitons will l ead t o i njusitce as stiuaitons M

e h t o t s n o it p e c x e e r a e r e h t s a t s u j s e l u r o t s n o it p e c x e s y a w l a e r a e r e h t , s u h T . r e ff i

d FNp irnciple .

d l u o w h c i h w r e n n a m a n i d e il p p a e b t o n , r e v e w o h , d l u o h s e l p i c n ir p N F M s i h t o t s n o it p e c x e e h T

5Pete rVanDenBossche,‘ TheLawandPoilcyoft heWolrdTradeOrganisaiton :Text ,Case sandMateiral,s‘ 2ndediiton

6Thi sequallyappilest oexpotrs

7Pane lDecisioni nBelgium-FamliyAllowances

e d a rt n o n o it c ir t s e r d e s i u g s i d r o n o it a n i m ir c s i d e l b a if it s u j n u r o y r a rt i b r a e t u ti t s n o

c .Common

s d n a s d o o g o t s e il p p a t i s a e l u r N F M e h t o t s n o it p e c x

e ervices aref oundi nAritcleXXoft he GATT :

e r a h c i h w S T A G f o V I X e l c it r A 4 9 9 1

x Necessaryt oprotec tpubilcmoralso rmaintainpubilcorder; x Necessaryt oprotec thuman ,anima lo rplantl fieandheatlh;

x Necessary to secure compilance wtih laws no tconsisten twtih the agreemen tincluding , .

y t e f a s d n a y c a v ir p , d u a rf e l p m a x e

e s e h T . S T A G d n a 4 9 9 1 T T A G e h t n o h t o b ’ s n o it p e c x e l a r e n e g

‘ d e lt it n e e r a s n o it p e c x e e s e h t ll A

e t o m o r p d n a t c e t o r p o t y r a s s e c e n s n o it a l s i g e l r o s e r u s a e m t p o d a o t r e b m e m a w o ll a s n o it p e c x e

t n e m t a e rt N F M e h t o t s n o it p e c x e r e v e w o h e r a e r e h T . s t s e r e t n i d n a s e u l a v l a t e i c o s e v o b a e h t

h w S T A G e h t r e d n u n o it a g il b

o erein exemp itons ilsted by WTO Members are highly recognised . 424 excepitonsare ilsted by79Members:

x 18OECDwtih157exempitons x 61non–OECDwtih267excepitons

x Oft he49memberswtihnoexempiton ,48are non OECD

o i d u a d n a t r o p s n a rt e r a s n o it p e c x e l l a f o f l a

H -visua land one t hrid are ifnancia lservices .There i s t

n e m t a e rt N F M s i h t m o rf n o it a i v e d t i m r e p h c i h w s n o i s i v o r p r e h t o r e v e w o

h .Like GATTAritcleXXIV

M s w o ll a h c i h

w embers to afford more preferenita l rteatmen tto countires wtih which they have S T A G . e d a rt e s i d n a h c r e m f o e s a c e h t n i n o i n u m o t s u c r o t n e m e e r g a e d a rt e e rf a o t n i d e r e t n e

n o it a r g e t n i l a n o i g e r r o f s w o ll a o s l a V e l c it r

A wtih exemp itono fcount ires paritcipaitngi n i ntegraiton n a o t n i r e t n e o t r e b m e M O T W a s ti m r e p V e l c it r A . s t n e m e ri u q e r N F M e h t m o rf t n e m e e r g a

e h t d e d i v o r p , s i s a b l a r e t a li r u l p r o l a r e t a li b a n o s e c i v r e s n i e d a rt e s il a r e b il r e h tr u f o t t n e m e e r g a

a h t n e m e e r g

a s ‘substanita l secto ira l coverage ’ and removes substanitally al l disc irminaiton s r e b m e M n e e w t e b e l b i s s i m r e p t o n s i n o it a n i m ir c s i d t a h t s n a e m e r o f e r e h t tI . s t n a p i c it r a p n e e w t e b

e b m e M o t d e il p p a e b y a m s n o it i d n o c t n e r e ff i d t u b n o i n u m o t s u c r o e n o z e d a rt a f

o rs of t he WTO

n o it a i v e d a y lr a e l c s i s i h T . n o i n u m o t s u c r o e n o z e d a rt r a l u c it r a p a f o s r e b m e m t o n e r a h c i h w

O T W l l a o t t n e m t a e rt l a n o it i d n o c n u d n a e t a i d e m m i e m a s s e ri u q e r h c i h w e l u r N F M e h t m o rf

i s e d e b t s u m s t n e m e e r g A n o it a r g e t n I c i m o n o c E e li h W . s r e b m e

M gned t o f aclitiate rtade amongs t

i v d e s i a r t o n s i s r e ir r a b f o l e v e l ll a r e v o e h t t a h t s e ri u q e r S T A G f o V e l c it r A , s t n a p i c it r a

p -a-vis non

f o l a w a r d h ti w e h t o t d a e l t n e m e e r g a n a d l u o h s e s i w r e h t O . d e r e v o c s r o t c e s e h t n i s t n a p i c it r a p

o c e t a ir p o r p p a , s t n e m ti m m o

c mpensaiton mus tbe nego itated wtih the Members a ffected .Such ,

e l p m a x e r o f , e s ir a y a m s n o it a u ti

s fi t he new common regime i s modelled on t he previous regime m o rf d e t n e v e r p e r a t n e m e e r g a e d a rt a o t s t n a p i c it r a p h g u o h T . e d a rt e v it c ir t s e r e r o m a f o

a n i m ir c s i

d iton ,there is howeve rdeviaiton rfom the MFN rule as differen tcondiitons may be .

t n e m e e r g a e d a rt r a l u c it r a p e h t f o t u o s r e b m e M O T W r e h t o o t e l b a c il p p a

e h t o t e s u a l C g n il b a n E e h t n i t a h t s i g n i s s u c s i d h tr o w e l p i c n ir p N F M e h t o t n o it p e c x e r e h t o n A

9 1 T T A

G 94 whichallowsf o rpreferenita lmarke trteatmentt o developing countires .The equivalen t . s e ir t n u o C d e p o l e v e D s s e L r o f y ti r o ir p l a i c e p s f o s k l a t h c i h w V I e l c it r A s i S T A G e h t n i n o i s i v o r p

e n e G e h t o t y ti d il a v t n e n a m r e p s e v i g e c it c a r p n i e s u a l C g n il b a n E e h

T railsedSystemo fPreference

g n i d a rt f o s e ir o g e t a c t n e r e ff i d n e e w t e b e t a n i m ir c s i d o t s e ir t n u o c d e p o l e v e d s ti m r e p t I . ) P S G (

h c i h w ) s e ir t n u o c d e p o l e v e d t s a e l d n a g n i p o l e v e d , d e p o l e v e d n e e w t e b , r a l u c it r a p n i(

s r e n tr a p

e h t f o I e l c it r A e t a l o i v e s i w r e h t o d l u o

w GATT 1994 which r equries no WTOMembert o be rteated e

s r o

w of fthan any othe r(MFN rteatmen)t .In effect ,this allows developed countires to give g n i p o l e v e D . s e ir t n u o c d e p o l e v e d t s a e l o t y lr a l u c it r a p , s e ir t n u o c r e r o o p o t t n e m t a e rt l a it n e r e f e r p

r a s e ir t n u o

c e permitted to enter i nto preferenita l rtade agreements which do no tmee tthe st irc t s e ir t n u o c g n i p o l e v e d f o n o it a u ti s n i y ti li b i x e lf r o f d e e n e h t s i e r e h T . 4 9 9 1 T T A G n i t u o d i a l a ir e ti r c

s t n e m e e r g a e d a rt o t t r a p g n i e

b ⁸ .This i s a violaiton o fthe MFN rteatmen tunde rthe WTO l aw . n

a e m s e ir t n u o c g n i p o l e v e d o t t n e m t a e rt l a it n e r e f e r p g n i v i

G s tha tothe rWTOMembers paritcula lry

e s r o w d e t a e rt e b l li w s e ir t n u o c d e p o l e v e d e h

t of fthan these developing count ires whereas the t

t n e m t a e rt l a u q e s e ri u q e r t n e m t a e rt N F

M o al lWTO Members wtih regard t o rtade i n goods and ,

s e c i v r e s

g n i s s u c s i d h tr o w n o it p e c x e r e h t o n

A ist hesecurtiy excepiton i n AritcleXX IGATT1994and Aritcle e h t n i y r a s s e c e n e r u s a e m y n a e k a t o t m o d e e rf s r e b m e M s e v i g n o it p e c x e s i h T . S T A G f o s i b V I X

a s a s e r u s a e m e v it c ir t s e r e d a rt e k a t o t s r e b m e M O T W s w o ll a t I . y ti r u c e s l a n o it a n r i e h t f o t s e r e t n i

e

m ans to achieve naitona lsecurtiy⁹ .Unde rthis excepiton ,Members can ,subjec tto ilmtiaitons , t n e m e r u c o r p t n e m n r e v o g d n a s e i d i s b u s n o it c u d o r p , s ff ir a t t r o p m i h g u o r h t n o it c e t o r p e d i v o r p

h w s e r u s a e m n i a tr e c n i a t n i a m r o t p o d a o t r e b m e M a s ti m r e p t I . s e c it c a r

p ich tha t Membe r

s i h t r e d n u t i b m a e d i w y r e v e v a h s r e b m e M . t s e r e t n i y ti r u c e s l a it n e s s e s ti r o f y r a s s e c e n s r e d i s n o c

a t a h t e v it a r e p m i s i ti , r e v e w o H . y ti r u c e s t c e t o r p o t t p o d a o t s e r u s a e m o t d r a g e r h ti w n o it p e c x e

e n i a t n i a m e b w e i v e r l a i c i d u j f o e e r g e d n i a tr e

c d otherwise the provision wli lbe prone to abuse wtihou tredress. A ta minimum ,Pane land t he Appellate body should conduc tan examinaiton as

p n o it a n a l p x e e h t r e h t e h w o

t resented by a Membe rwtihr egardt o tissecurtiy measuresconsttiute s

u b a t n e r a p p a n

a e¹⁰ .This securtiy excepiton thereo fundermines the WTO p irnciple o fMFN

8WolrdTradeOrganisaiton,‘ TheGenera lAgreemen tonTradei nServices n : A Inrtoduciton‘ ,March2006

9AritcleXXIo fGATTwasi nvokeda sadefencei nUS-Expor tRestirciton( 1949) ,Oslavia

0

1 The GATTUS-Impotr so fsuga rfromNicaragua(1984) ,ECC-Trade Measurest akenagains tSocia lRepubilc o fYug. Pane’l s S

U n i t n e m e t a t

s -TradeMeasure sAffecitngNicaragua

t n e m t a e

rt .Fo rthe purpose o fsecurtiy Members may adop t rtade bar irers and preferenita l ir u c e s f o e s o p r u p e h t r o f t n e m t a e rt l a it n e r e f e r p f o m r o f y n A . s g n il a e d e d a rt r i e h t n i t n e m t a e

rt ty wli l

. t n e m t a e rt N F M e h t f o n o it a l o i v e b

. V

I TRENDS LEADINGTOTHEI MPORTANCEOFMFNMARGINALISATION

m e t s y s g n i d a rt l a r e t a li tl u m e h t f o s e l p i c n ir p l a t n e m a d n u f e h t f o e n o s i t n e m t a e rt N F M e h t h g u o h T

O T W e h t r e d n

u ,recen t rtends show a deviaiton o rretrea t rfom this p irnciple such tha t ti i s now t

s o

m otfenappiledasanexcep itonr atherthana generalr ule .

s ti f e n e b c i m o n o c e f o e b t o n t h g i m h c i h w s t s e r e t n i d n a s e u l a v l a t e i c o s r e h t o t c e t o r p o t d e e n e h T

il b o t n e m t a e rt N F M e h t f o e c n a tr o p m i e h t o t d e l s a

h gaitonbeingsteadliymarginailsedovert hel as t e h t , y t e f a s r e m u s n o c , h tl a e h c il b u p f o n o it c e t o r p d n a n o it o m o r p e h T . s e d a c e d e e r h t o t o w t

f o s k s a t e r o c e r a y ti r u c e s l a n o it a n d n a t n e m p o l e v e d c i m o n o c e , t n e m y o l p m e , t n e m n o ri v n e

r h t t a h t e u rt s i tI . t n e m n r e v o

g ough rtade envrionmentally f irendly products orl fie-saving medicines . y l e v it c e p s e r s t n e it a p d n a r e m u s n o c o t e l b a li a v a s e m o c e b e s i w r e h t o e l b a li a v a e b t o n d l u o w t a h t

t s e r e t n i d n a s e u l a v l a t e i c o s e s e h t e t o m o r p d n a t c e t o r p o t t u

B s ,governments also rfequenlty adop t

n o it a l s i g e

l s o rmeasureswhichinadve trenlty o rdeilberatelyconsttiutebarirerst o rtade . t

s e r e t n i d n a s e u l a v l a t e i c o s e s e h t t c e t o r p d n a e t o m o r p o

T ,Members are o tfen poilitcally and/o r

n o it a l s i g e l r o s e r u s a e m t p o d a o t d e ll e p m o c y ll a c i m o n o c

e s whichare i nconsisten twtihp irnciples o f e

h

t WTOl awespecially t hep irnciples o fnon-disc irminaiton¹¹andt he r ules onmarke taccess .The t

s e r e t n i d n a s e u l a v l a t e i c o s e s e h t f o n o it c e t o r p e h t r o f d n a m e d g n i s a e r c n i r e v

e s which migh tno t

e

b o fany economic beneftisbu tveryi mpo trantt o t heMembersaccountsf ort hemarginailsaiton o f .

s e d a c e d e e r h t r o o w t t s a l e h t r e v o N F M e h t

n a s i e d a rt l a n o it a n r e t n I n i s e ir t n u o c g n i p o l e v e d d n a t s a e l f o n o it a p i c it r a p e s a e r c n i o t d e e n e h T

il a n i g r a m N F M o t n o it u b ir t n o c t n a tr o p m

i saiton .There are otfen complaints by leas tdeveloping t s a e l f o n o it a p i c it r a p e h t e s a e r c n i o T . e d a rt l a n o it a n r e t n I n i t n e m e v l o v n i e lt ti l ri e h t t u o b a s e ir t n u o c

o t s s e c c a t e k r a m l a it n e r e f e r p e d i v o r p o t s r e b m e M s ti m r e p w a l O T W e h t , s r e b m e M g n i p o l e v e d d n a

s a e

l tand developing countires .A stirc tappilcaiton o fmarke taccess condiitons amongs tthe t s a e l e h t f o n o it a p i c it r a p e h t e g a r u o c s i d l li w s r e b m e M g n i p o l e v e d d n a d e p o l e v e d t s a e l , d e p o l e v e d

e v e d e h t h ti w e t e p m o c o t r o o p n e tf o e r a y e h t s a s r e b m e M g n i p o l e v e d d n

a loped Members .One

m e h t e d i v o r p o t s i e d a rt l a n o it a n r e t n I n i s e ir t n u o c r o o p e s e h t f o n o it a p i c it r a p e h t e s a e r c n i o t y a w

1

1 Paritculalryt hepirncipleo fMFN rteatmen tobilgaiton

w n o it i d n o c s s e c c a t e k r a m l a it n e r e f e r p h ti

w hich is conrtary to the WTO pirnciple o f non- a

l O T W s e t a l o i v s i h t h g u o h T . ) N F M ( n o it a n i m ir c s i

d w i t is necessary given the increased

e h t f o n o it a s il a n i g r a m s e if it s u j s i h T . e d a rt l a n o it a n r e t n I o t s e ir t n u o c g n i p o l e v e d e h t y b n o it u b ir t n o c

.t n e m t a e rt N F M f o e l p i c n ir p

a s i s t n e m e e r g a l a r e t a li r u l p d n a l a r e t a li b h g u o r h t n o it a s il a r e b il e d a rt n i e s a e r c n i e h

T cause t o t he

w o ll a S T A G f o V e l c it r A d n a 4 9 9 1 T T A G e h t f o V I X X e l c it r A . e l p i c n ir p N F M e h t f o n o it a s il a n i g r a m

e n o z e d a rt e e rf d n a s n o i n u m o t s u c s a h c u s n o it a r g e t n i l a n o i g e r h g u o r h t n o it a s il a r e b

il s .The eve r

t n a tr o p m i n a s i s e n o z e d a rt f o r e b m u n g n i s a e r c n

i contirbuiton t o t he marginailsaiton of t he MFN .

e l p i c n ir

p ¹² Members o f rfee rtade zones and custom unions are permitted to apply condiitons n

o n o t e l b a c il p p a s e n o e h t o t t n e r e ff i

d -Members o fthe rfee rtade zone o rcustom union .This p

i c n ir p N F M e h t s e t a l o i

v le whichr equries equa lrteatmentf o rall .This i ntegraiton agreemen twhich m e h t ti m r e p r e v e w o h t o n s e o d , s e v l e s m e h t t s g n o m a e d a rt e s il a r e b il o t O T W e h t f o s t e s b u s s w o ll a

o i n u m o t s u c r o e n o z e d a rt a o t s r e b m e M . m e t s y s g n i d a rt l a r e t a li tl u m e h t t s n i a g a o g o

t n are no t

n o n t s n i a g a e t a n i m ir c s i d o t d e w o ll

a -Members, f o rexample, t axing ou tof t he presc irbed ilmtis. I n r o e n o z e d a rt a o t s r e b m e M . e l b a t p e c c a s i t i s ti m il n i h ti w s i g n i x a t n i e c n e r e ff i d e h t s a r a f o s

. t s e r e t n i n o m m o c a e v a h y ll a m r o n l li w n o i n u m o t s u

c To achieve t ha tcommon i nterest i s t o allow e h t h ti w e c n a d r o c c a n i s i t i d e d i v o r p s e v l e s m e h t t s g n o m a e d a rt o t w o h e n i m r e t e d o t m e h t

N F M f o n o it a s il a n i g r a m r o f d n u o r g a s i t s e r e t n i n o m m o c t a h t t c e t o r p o T . m e t s y s g n i d a rt l a r e t a li tl u m

e m t a e rt l a u q E . e l p i c n ir

p n tmigh tno tachievet ha tcommoni nteres to fa rtade o rcustomunion .

A T A E R T E R .

V THREATTOTHEMULTILATERALTRADINGSYSTEM?

e h t o t s u o r e g n a d t i r e d i s n o c s r e h t o e li h W . e l p i c n ir p N F M m o rf t a e rt e r s i h t n o e t a b e d h c u m s i e r e h T

o m e t s y s g n i d a rt l a r e t a li tl u

m thers are op itmis itc abou t ti . The fea ris tha t abandonmen t o f e d o r e , m r e t r e g n o l e h t n i , d l u o c m s il a n o i g e r d n a m s il a r e t a li b f o r u o v a f n i n o it a s il a r e b il l a r e t a li tl u m

e k a e w t n e m ti m m o c l a c it il o p ’ s r e b m e M s ti s A . O T W e h t g n i n n i p r e d n u s e n il p i c s i d d n a s e l u r e h

t ns ,

s ti f o k c o r d e b e h t , s g n i d e e c o r p t n e m e lt t e s e t u p s i d s ti t c e p s e r o t s s e n g n il li w r i e h t d l u o c o o t o s

. y ti r o h t u

a ¹³Pasca lLamy ,Driecto rGenera lo fWTOhas anopitmisitc view about t his r ecentr ertea t .t

n e m t a e rt N F M m o

rf ¹⁴

2

1 ByJ uly2005 ,onlyoneWTOMember-Mongoilawa sno tpar tof ar egiona lrtadeagreemen.t

3

1 G.deJ onquiere,s ’Globa lTrade :Oultookf o rAgreemen tNear sMomen to fTruth, ’Financia lTimes ,24J anuary2006

4

1 COMESA andSADC havecontirbutedt oabette rpreparaitonoft hei rmembercountire son rtade i ssues ,whichhadposiitve O

T W e h t n i n o it a p i c it r a p r i e h t n o s r e v o l li p s

t o n s i N F M m o rf t a e rt e r s i h t n o i n i p o y m n

I a fundamental t hreatt o t he mutlliatera l rtading system n

a y l e r e m t u

b evoluitonarystep ont hepatht ogreate rrtade ilberaiton . t

n e m e e r g a e d a rt l a n o i g e

R s can actually suppor tthe WTO mutlliatera l rtading system. Regiona l i

e l o r d e d e e n h c u m a y a l p n a c s g n i p u o r

g n the WTO preparaitons by raising awareness ,by s

w e i v f o e g n a h c x e e h t r o f m r o ft a l p a g n i d i v o r p y b , g n i n i a

rt and informaiton ,and by sitmulaitng

tr a p e h t e s a e r c n i n a c h c i h w s e v it a it i n i g n i d li u b y ti c a p a c e d a

rt icipaiton o fthei rMembers in the

O T

W ¹⁵ . Regiona l agreemen t has allowed groupings o f countires to negoitate rules and e s e h t f o e m o s , n r u t n I . y ll a r e t a li tl u m e m it e h t t a e l b i s s o p s a w t a h w d n o y e b o g t a h t s t n e m ti m m o c

t n e m e e r g a r o f y a w e h t d e v a p e v a h s e l u

r s ni the WTO . Services , intellectua l prope try , n i d e s i a r e r e w t a h t s e u s s i ll a e r e w s e i c il o p n o it it e p m o c d n a s t n e m t s e v n i , d r a d n a t s l a t n e m n o ri v n e

n I . O T W e h t n i n o i s s u c s i d f o s c i p o t r o t n e m e e r g a o t n i d e p o l e v e d r e t a l d n a s n o it a it o g e n l a n o i g e r

i m s il a n o i g e r t c e ff

e s an evoluitonary step on the path to greate r rtade ilberailsaiton as i t w e i v e h t n i n e e s h c u m s i s i h T . ti o t t a e r h t a t o n d n a m e t s y s g n i d a rt l a r e t a li tl u m e h t s t n e m e l p m o c

h n e d l u o c t s e r e t n i n o m m o c a e v e i h c a o t s g n i p u o r g l a n o i g e r e h t n i h ti w s t n e m ti m m o c t a h

t ance

s p u o r g l a n o i g e r e s e h t y b n i t h g u o r b e b t h g i m f o t h g u o h t y ll a it i n i t o n s a e d I . O T W e h t n i s n o it a it o g e n

m p o l e v e d e h t o t e t u b ir t n o c l li w s a e d i h c u s d n

a en to fWTO p irnciples .A wl a o rrule is only s

n i s e g n a h c d n a y t e i c o s e h t f o s d e e n e h t t e e m o t y r a s s e c e

n ociety should therefore modfiy the

h ti w h c u o t n i ti e k a m o t e l p i c n ir p r o w a l a f o n o it a c il p p

a thecontemporarysociety .

. I

V CONCLUSION t

s o M e h

T -Favoured-Naiton rteatmen tobilgaiton ,although ti i s subject t o a numbe ro fexcepitons w

o h s s d n e rt t n e c e r d n

a rerteatf orm i tsucht ha ttii s nowmos toften appiledas anexcepiton r athe r n

a h

t a genera lrule stli lstands as one o fthe fundamenta lp lliars o fthe WTO .Subject to the t

n e m t a e rt N F M , s n o it p e c x

e remainsa p irncipa lobilgaitonf o rWTOMembers .Members wil lalways s tI . e l u r e h t o t s n o it p e c x e e h t f o e c n e s b a e h t n i n o it a g il b o e h t o t e r e h d a o t d e t c e p x e e b

m e t s y s g n i d a rt l a r e t a li tl u m e h t o t t a e r h t a d e r e d i s n o c e b t o n e r o f e r e h t d l u o h s n o it a s il a n i g r a m

o h t a p e h t n o p e t s y r a n o it u l o v e y r a s s e c e n a t u b O T W e h t r e d n

u fgreate rrtade ilberailsaiton.